Who Holds the Purse Strings?

Abstract

Couples in Australian households make financial decisions in two distinct modes (jointly as a couple unit, or individually with one partner taking the lead) and the choice between modes correlates with both partner satisfaction and subsequent separation hazard in ways that family-of-origin and household-composition controls do not fully explain. The behavioural-finance literature has documented these correlations across multiple panel datasets; what has not been clearly identified is whether the decision-mode choice causes relational decline, reflects it, or is jointly determined by an unobserved third factor.

The conceptual framework treats intra-family financial decision-making as a behavioural and relational mechanism rather than a static household characteristic. The paper separates day-to-day financial control, investment decision-making, income contribution, satisfaction, and separation risk as distinct constructs, rather than treating household financial decision-making as one broad variable. The behavioural question is which combinations of decision power are protective, neutral, or destabilising for couples.

The empirical setting is a national household panel, restricted to coupled households with non-missing items in the financial-decision-making module and the partner-satisfaction battery. The existing analysis applies the classical identification stack: OLS linear-probability models with household and regional fixed effects, logit and probit estimation for the binary decision-mode outcomes, random-effects panel regression for the within-household dynamics, Oaxaca-Blinder decomposition of the gender-asymmetric decision-mode pattern, and Cox proportional-hazards modelling for separation duration. The existing classical evidence already shows that females are less likely to make investment decisions themselves and more likely to make day-to-day decisions themselves; both genders making decisions themselves report lower partner satisfaction.

We propose extending the existing analysis with a Causal Forest CATE estimator that would recover the heterogeneous effect of decision-making mode on partner satisfaction across the gender × income-contribution-share strata. The proposed extension, once implemented, would identify whether the satisfaction penalty is concentrated in the 50–75 percent income-contribution band and supply a couples-counselling-segment screening rule.

Data & Methods